Friday, May 31, 2013

Now that was an interesting close! Rebalancing? Maybe technically speaking. Fundamentally, prices were falling of their own weight. This is but an element of fate proceeding from the battle for hot money in a global currency war.

"The more analysts dig ... the less they like what they see. For the week, the South African rand dropped 5.1%. The Brazilian real sank 4.2%, the Chilean peso declined 2.5%, the Malaysian ringgit 2.0%, the Hungarian forint 2.0%, the Peruvian new sol 2.0%, the Mexican peso 2.1%, the Russian ruble 1.6%, the Philippine peso 1.6%, the Turkish lira 1.5% and the India rupee 1.5%.

"Despite a surprise 50 bps increase in rates, the Brazilian real traded to a four year low this week. It is worth nothing that Brazil’s local 10-year government yields jumped just over 100 bps during May to 10.48%. Mexico’s 10-year local yields rose almost 100 bps to 5.45%. Russian yields were up about 80 bps for the month to 7.28% and Turkey’s yields were up 70 bps to 6.71%."
—"It's Going to be Another Interesting Summer" (Credit Bubble Bulletin, 5/31/2013

There's just no escaping decimation in the London-New York Axis of Fraud war against the nation state. Inevitably devastation will visit the war's hyperinflationary hosts, as well. This at least is warning confirmed by today's second Hindenburg Omen of Q2 2013. As circumstance would have it, when the fateful spark ignites financial fuel more combustible than hydrogen garbage connoisseurs will be hard-pressed finding any place to hide...

That's what you would call "all in." With the easy side of hyperinflationary bailout of illegitimate financial claims held by the hopelessly insolvent behemoths of the trans-Atlantic fast approaching its expiration date, the chaotic aftermath now pressing toward the core in a rising rate environment finds many a fattened pig ready for slaughter.

Yet it's probably the case this will not occur instantaneously. A period of some weeks spent topping appears the likely course from here. Both the lead up to the May 2010 "flash crash" and the Summer 2011 swoon rather substantiate this view.

Analysis centers on the stock market's path of least resistance. Long-term, this drives a simple strategy for safely investing a 401(k) for maximum profit. Intermediate-term, investing with stock index tracking-ETFs (both their long and short varieties) is advanced. Short-term, stock index options occasionally offer extraordinary profit opportunities when the stock market is moving along its projected path.

Nothing is set in stone. Nor is the stock market's path of least resistance always known. More often than not, there are no stock index option positions recommended.

Thursday, May 30, 2013

I heard someone today compare the present investment environment to the 1950s. No, it wasn't Laz. Good lord, the 1950s(!) ... when the U.S. was a net exporter of high end capital goods, as opposed to today's high end (and massively overpriced) trash. There is just no comparison.

Pity, the monkey see, monkey do crowd, although reported to be abuzz with concern for rising interest rates, evidently has yet to connect the dots per the threat this presents to central bank solvency. I was alive only six months in the 1950s, but I can assure you the threat of central bank insolvency was not living then. That we can be sure of.

Now, I hate to bust up the hyperinflationary bailout makes the financial world higher game, but it looks like Mr. Market could be a lot closer to panic than we have thus far been assuming...

Not the prettiest 5-wave Elliott channel, but technically well-substantiated nevertheless. What we see in the 5th wave is called "throw over."

This is the first time the above Elliott wave view has been presented here. What's most intriguing is prospect that, 5 waves up from early-June 2012 seen forming wave (c) of an a-b-c corrective wave up from March '09 bottom are just about completed, if not having done so last week.

Added technical substantiation to the above Elliott wave view is provided via the NYSE new 52-week high-low differential. No longer a mystery is that sudden, astonishingly out of the blue peak this measure reached last September. It coincided with formation of wave iii of 3 of (c) and thereby demonstrated the greater degree of dynamism typically accompanying Elliott 3rd waves.

You will recall this measure had been persistently languishing after peaking late-April 2010. With each new high, post-March '09 bottom, the NYSE Composite Index reached following the May 2010 "flash crash" the NYSE new 52-week high-low differential kept falling short of its prior peaks. Then, out of the blue came last September. Now an Elliott 3rd wave clearly is seen substantiated. All the more is this seen over the course of this year's trading, as well, assuming the 5th wave of wave (c) has been unfolding, as is indicated in the first chart above (remember, a "c" wave is an Elliott 3rd wave, so typical dynamism rightly is accompanying its formation, albeit somewhat diminished over the interim the 5th wave of wave (c) has unfolded).

On all counts we see technical deterioration develop, 4th wave versus 2nd wave, as 5 waves up from early-June 2012 have unfolded. We see this via the NYSE Composite's RSI and MACD, as well as the NYSE new 52-week high-low differential. We also see this same technical deterioration, 4th wave versus 2nd wave, relative to the 5 waves up from mid-November 2012 (these are assumed forming wave 5 of (c)).

Peak volume came during formation of wave iii of 3 of (c). Peak RSI, as well (see the first chart's top panel).

Now, we still have the NYSE Composite's momentum (see the first chart's bottom panel) falling short of its February 2012 peak, which itself fell short of its October 2011 peak. Well, the fact of the matter is the a-b-c Elliott corrective wave up from March '09 bottom is reasonably assumed forming wave B of an a-b-c corrective wave down from the NYSE Composite's October 2007 top. Recall, when an Elliott "b" wave forms often the analyst is left to conclude "something's just not right." The NYSE Composite's momentum—deteriorating since October 2011, and all the more as wave (c) of B has formed—certainly invites this conclusion. Indeed, this condition is but icing on the deteriorating volume cake, which, itself, likewise is suggesting "something's just not right."

There is a lot of bullishness out there, while I have contrarily argued with utter consistency that this is entirely misplaced. Resumption of the market's correction of 5 waves up from 1932-2000 (or 2007, depending on the index) certainly has been a long, frustrating time coming. Today's view of things rather suggests the market's hard turn south could begin very soon, that is if last week's peak did not mark the start of a severe swoon whose portent still could find major indexes sometime later this year taking out March '09 support like it never existed. I remain that bearish. The only thing from the 1950s which to compare my outlook with would be found at an above ground nuclear bomb test site. We should all pray any prospective similarity, now versus the 1950s, ends with these words and not in tragic fact turning some city, foreign or domestic, into a desert...

Analysis centers on the stock market's path of least resistance. Long-term, this drives a simple strategy for safely investing a 401(k) for maximum profit. Intermediate-term, investing with stock index tracking-ETFs (both their long and short varieties) is advanced. Short-term, stock index options occasionally offer extraordinary profit opportunities when the stock market is moving along its projected path.

Nothing is set in stone. Nor is the stock market's path of least resistance always known. More often than not, there are no stock index option positions recommended.

Wednesday, May 29, 2013

There is no doubt about it. A pullback of at least modest consequence is being telegraphed by the market's current internal state...

At best, a more or less sideways trading affair might develop over coming days and weeks, while a pullback to the vicinity of April's lows eventually could materialize, as well.

For the moment, though, given the McClellan Oscillator's relatively deep negative state and the measure's 5% and 10% Index declines to neutral readings, last week's NYSE Composite Index low appears relatively safe.

So, you can pass the time listening to all the banter you choose about the Fed's QE plans, yet have no doubt about what's ahead. The Fed is dead. Confetti never had a chance. King Ponzi (Greenspan) saw to that.

Analysis centers on the stock market's path of least resistance. Long-term, this drives a simple strategy for safely investing a 401(k) for maximum profit. Intermediate-term, investing with stock index tracking-ETFs (both their long and short varieties) is advanced. Short-term, stock index options occasionally offer extraordinary profit opportunities when the stock market is moving along its projected path.

Nothing is set in stone. Nor is the stock market's path of least resistance always known. More often than not, there are no stock index option positions recommended.

Tuesday, May 28, 2013

Not a lot to report today ... other than the 10-year U.S. Treasury Note seriously wandering off the reservation, now yielding 2.15%. Whatever it takes to support the U.S. dollar? As long as hot money continues flowing into equities, which favored condition is indicated via the dollar's relative performance versus the S&P 500. Still, judging by the Volatility Index and the CBOE Put/Call Ratio, the presently quiescent state of capital flows to such desired ends as trapped central banks have been desperately promoting is at increasing risk of upset. Positive momentum—MACD—of each measure suggests this.

So, summarizing this short thought, "whatever it takes" to support a U.S. dollar otherwise being massively depreciated in a venture now putting upward pressure on interest rates is just begging a crisis whose result coaxes capital flows into dollar-denominated debt securities. Whatever affair is conjured, though, there certainly will be no questioning what came first, the chicken or the egg...

Analysis centers on the stock market's path of least resistance. Long-term, this drives a simple strategy for safely investing a 401(k) for maximum profit. Intermediate-term, investing with stock index tracking-ETFs (both their long and short varieties) is advanced. Short-term, stock index options occasionally offer extraordinary profit opportunities when the stock market is moving along its projected path.

Nothing is set in stone. Nor is the stock market's path of least resistance always known. More often than not, there are no stock index option positions recommended.

Friday, May 24, 2013

Here's something confirming all is not well in the garbage trade, likewise heightening risk prices soon could fall of their own weight, and rather profoundly at that...

Even prior to March '09 bottom the NASDAQ Composite index, as a general trend, was performing better than the S&P 500 (see bottom panel). However this has not been the case for well over a year now. NASDAQ's relative performance versus the S&P 500 has been decidedly fading.

When love at the bottom of the capital structure is increasing, so too should we expect NASDAQ's relative performance versus the S&P 500 to objectively display this, as well. Yet in the lead up to the Fed's infinite QE, hyperinflationary bailout policy, and only the more so subsequently, love at the bottom of the capital structure is seen narrowing. All manner of tricks gatekeepers have deployed to exploit a broken price discovery mechanism—a matter of circumstance exposed by persistently fading volume—now fail general conditions otherwise necessary to sustain the market's rising trend. NASDAQ's relative lag versus the S&P 500 reveals a market at heightened risk of coming undone.

In fact we might expect considerable selling pressure sometime in the not-too-distant future. The lead up to the market's August 2011 swoon saw love fade similarly, NASDAQ vs. the S&P 500, as the market pushed higher into its peak earlier that year. At present, however, we are seeing a much more pronounced fade as the overall market pushes still higher. The Jetson's dog, Astro, probably said it best: Rutro Relroy. The dogs who today salivate for a bull market their bark suggests will persist for as far as the eye can see evidently got some splanin' to do...

Analysis centers on the stock market's path of least resistance. Long-term, this drives a simple strategy for safely investing a 401(k) for maximum profit. Intermediate-term, investing with stock index tracking-ETFs (both their long and short varieties) is advanced. Short-term, stock index options occasionally offer extraordinary profit opportunities when the stock market is moving along its projected path.

Nothing is set in stone. Nor is the stock market's path of least resistance always known. More often than not, there are no stock index option positions recommended.

Thursday, May 23, 2013

A closer look at the market's advance since the latter half of April might make current expectation for a short period ahead spent topping, this lasting some days, a no go. In other words, this year's advance very well could be in the midst of meeting its first substantial challenge, this at least to the effect of seeing gains made since the latter half of April largely given back.

Substantiating this modified outlook is the above Elliott wave-based view applied to the Dow Jones Industrials Average showing a 5-wave channel containing the index's advance since its mid-April bottom. Typical 4th wave versus 2nd wave technical deterioration is evidenced via RSI (top panel), with the 4th wave completing early this month (May), and the 5th wave proving the extended wave in the sequence.

Most often the 3rd wave proves the extended wave in a 5-wave sequence. Indeed, wave 3 of five waves up from mid-November bottom is likely to prove the extended wave, much as wave iii of 3 likewise proved during formation of wave 3. Note, however, wave 5 of iii was the extended wave of the five waves forming wave iii of 3, while the Dow's best technical disposition was displayed during formation of wave 3 of iii of 3, thus demonstrating a typical 3rd wave's dynamism.

Whatever is upcoming during formation of wave 4 of five waves up from mid-November—whether yesterday's wave 3 peak is exceeded in the interim—we can look forward to technical deterioration sinking RSI (top panel) and MACD (bottom) below levels at which these measures respectively stood at the conclusion of wave 2's formation late-December 2012.

Analysis centers on the stock market's path of least resistance. Long-term, this drives a simple strategy for safely investing a 401(k) for maximum profit. Intermediate-term, investing with stock index tracking-ETFs (both their long and short varieties) is advanced. Short-term, stock index options occasionally offer extraordinary profit opportunities when the stock market is moving along its projected path.

Nothing is set in stone. Nor is the stock market's path of least resistance always known. More often than not, there are no stock index option positions recommended.

Wednesday, May 22, 2013

No need to assume today's turnaround was anything other than the view presented here Friday manifest. One thing not mentioned in that outlook, though, was today's volume pickup. Here's how we read that. Put on a gruff voice, give it your best New York accent and say, "Hey, you want some garbage? Here, have some garbage."

No need to assume, either, the bond market is confused by Capo Confetti's QE intentions. Probably a fairer conclusion than that promoted by an oh so penetrating, Venetian-owned financial media per the 10-year U.S. Treasury now trading above 2% is that, everyone and yo mamma expects Confetti to remain busy sharpening his electronic scissors, ensuring the flood of liquidity raining from the Fed for the purpose of feigning demand for trash higher up in the capital structure continues unabated.

And did anyone in Congress today bother asking Confetti whether the Fed is aware its insolvency will be rapidly exposed in a rising rate environment? Shhhhh...

But seriously, why would a House of Representatives with the party of Make Work and Money Grab in the majority ask such a question when Confetti's dilemma portends a U.S. Treasury backstop whose pending necessity could only serve the party's longstanding objective of gutting federal outlays otherwise promoting the general Welfare? These agents of the Venetian mafia are a lot more transparent than the mafia's media (a.k.a. "The Patsy Protection Team") evidently is capable of deciphering.

Accompanying the past couple days' NASDAQ-focused Elliott wave count exercises is the same applied above to the NYSE Composite Index presenting two alternatives, one in black, the other in blue.

The same, too, is applied to the S&P 500 above. We could have presented two viable alternatives here, as well. It's possible wave 3 of (c) has been forming off early-June 2012 bottom, leaving waves 4 and 5 of (c) still to unfold.

Analysis centers on the stock market's path of least resistance. Long-term, this drives a simple strategy for safely investing a 401(k) for maximum profit. Intermediate-term, investing with stock index tracking-ETFs (both their long and short varieties) is advanced. Short-term, stock index options occasionally offer extraordinary profit opportunities when the stock market is moving along its projected path.

Nothing is set in stone. Nor is the stock market's path of least resistance always known. More often than not, there are no stock index option positions recommended.

Tuesday, May 21, 2013

Remember that "double three" I was detailing yesterday, alternation and all, projecting NASDAQ's Elliott wave form developing from March '09 bottom, as well as from October 2002 bottom before that?

Is this the very thing I was describing? Has that measure of wave alternation typically distinguishing the first "three" from the second "three" in a "complex" Elliott corrective wave already been largely manifest?

So, the a and b component waves of the wave (b) flat alternated in wave form, which is quite typical--to be expected--according to the Elliott Wave Principle.

Likewise do we see the Elliott Wave Principle's "alternation guideline" distinguishing waves (a) and (b) of the second "three" forming wave B (this second "three" unfolding off March '09 bottom). As has been commonly detailed in recent Elliott wave views I have applied to the NASDAQ Composite, a "rising wedge" once again might be thought unfolding, this time forming wave (c) since early-October 2011 bottom and prospectively completing the second "three" of wave B.

Moving along, now there's the matter of the second "three" unfolding off March 2009 bottom--(forming a 3-3-5 "flat")--alternating from the first "three" of wave B. The first "three" of wave B unfolded off October 2002 bottom and developed into a 5-3-5 "zig-zag" completing at NASDAQ's January 2004 peak.So, the second "three" of wave B alternated from the first "three."

A clean sweep. Across-the-board alternation. A Royal Flush.We're just one card away.

The blue line of support you see drawn above deserves some serious attention. Definitely a key inflection point that has developed in the formation of the prospective 3-3-5 "flat" up from March '09 bottom, as presented above.

If this "flat" in fact completes wave B, it's a good bet wave (1) of C down will destroy this indicated support, amd turn it into resistance. All this, too, likely the very least worse fate the market faces over the near- to intermediate-term .

Yes, all ye faithful, just like you read here yesterday: sometime over coming weeks and months, the worst decline since March '09 bottom rather appears likely upcoming.

Truth be told, I like the above NASDAQ Elliott wave view best of all those presented here so far.
Thus making tomorrow but another of several tomorrows likely spent completing the "rising wedge" forming wave (c), quite possibly pushing NASDAQ toward completing wave B to boot and prospectively setting up, say, a 38.2% collapse over a period of 5-8 weeks sometime later this year...

Analysis centers on the stock market's path of least resistance. Long-term, this drives a simple strategy for safely investing a 401(k) for maximum profit. Intermediate-term, investing with stock index tracking-ETFs (both their long and short varieties) is advanced. Short-term, stock index options occasionally offer extraordinary profit opportunities when the stock market is moving along its projected path.

Nothing is set in stone. Nor is the stock market's path of least resistance always known. More often than not, there are no stock index option positions recommended.

Monday, May 20, 2013

So, we see the party of Make Work and Money Grab euphemistically called "business" has voted down in Committee (check out the state constituency Tarpley attached to Rep. Duncan Hunter's name: LOL!) Representative John Tierney's version of Senator Elizabeth Warren's "Bank on Students Loan Fairness Act." Still, the national conversation is changing on account of Alexander Hamilton's resurrection these targeted, congressional efforts animate, and this necessarily means the Venetian mafia is facing a difficult environment in which to continue swindling its way to "legitimacy."

Alrighty, then. Now that we're up to date and up to speed, let's further ponder upcoming, intermediate-term possibilities...

Above is a slightly modified Elliott wave view applied to the the NASDAQ Composite than was assigned a week ago Friday. The reason for this simply is respecting the possibility that, following upcoming completion of wave B (the middle wave of an a-b-c Elliott corrective wave forming from NASDAQ's Y2k peak) the market's subsequent sinking might not result in March '09 bottom being taken out, which "better" possibility was briefly discussed here last Monday. Thus, rather than supposing a "rising wedge" has been forming off NASDAQ's March '09 bottom, we might consider the same exhaustion pattern instead has been developing since June 2010 bottom.

One characteristic of this "special" Elliott wave pattern (i.e. a "rising wedge") finds subsequent market action rapidly retracing the distance covered during the rising wedge's formation. Were we to suppose a rising wedge forming off March '09 bottom, like last Friday, then we could reasonably anticipate NASDAQ's upcoming collapse sinking the index below March '09 bottom. However, if we take the above view, then NASDAQ's anticipated, upcoming setback might not necessarily be quite so nasty.

What's more, the above view suggests a "double zig-zag" is forming wave B. What if, though, the proposed, upcoming completion of wave B indicated above is rushed? What if rather than a "double zig-zag" nearing its completion, wave B eventually takes the form of a "double-three," meaning some addition years possibly are to pass before wave B is completed? In this case we might expect the second "three" forming off March '09 bottom likely will alternate from the first "three," itself unfolding from October 2002 - January 2004 and forming a "zig-zag." The Elliott Wave Principle's "alternation guideline" advises us, then, to anticipate the second "three" likely to form a "flat" (thus alternating from the "zig-zag" forming the first "three"). Thus, too, the presumed "zig-zag" up from March '09 bottom might be seen in this particular view forming but wave (a) of the second "three," with wave (b) [down] set to begin unfolding imminently.

This prospectively upcoming wave (b) down, itself, is likely to form a "flat," this, again, per the Elliott Wave Principle's "alternation guideline."

Oh, if only this business were all so cut-and-dry and easy! Indeed, Robert Prechter, co-author of the Elliott Wave Principle, dutifully indicated the greater difficulty of forecasting Elliott corrective waves. We're seeing this play out quite vividly. Still, having some better sense of finite possibilities within the framework of the Elliott Wave Principle we enjoy a slight edge anticipating market reactions likely to proceed from upcoming, fundamental developments. There's every reason to believe smooth sailing is the least likely possibility ahead.

Although indeterminable might be the depth of any setback whose probability, indeed, presently appears heightened, this market appears to be facing a considerable degree of selling pressure upcoming, and this likely greater than anything experienced since March '09 bottom. In fact this outlook presently is viewed virtually certain to occur sometime over upcoming weeks and months.

Analysis centers on the stock market's path of least resistance. Long-term, this drives a simple strategy for safely investing a 401(k) for maximum profit. Intermediate-term, investing with stock index tracking-ETFs (both their long and short varieties) is advanced. Short-term, stock index options occasionally offer extraordinary profit opportunities when the stock market is moving along its projected path.

Nothing is set in stone. Nor is the stock market's path of least resistance always known. More often than not, there are no stock index option positions recommended.

Friday, May 17, 2013

"It’s worth noting ... that when filthy rich market speculators were in the past celebrated for their brilliance and extraordinary market acumen – well, it proved a decent juncture to start worrying about the future. This spectacular cycle of speculator wealth accumulation has been going on for so long now that everyone has simply stopped worrying."
—"Financial Euphoria" (Credit Bubble Bulletin, 5/17/2013

Well, not "everyone" has stopped worrying. Not here anyway. Likewise, a perfectly unsustainable financial backdrop ripe for manufactured swindle will be ignored at the peril of "filthy rich" market speculators to be sure. Indeed, we might cite notably suspect internal dynamics accompanying the market's advance since mid-November 2012 presented by a persistently muted NYSE advance-decline differential as indicating that, even so called "filthy rich" market speculators, the likes advising shorts "have a shovel to get out of the grave," are being played like a fiddle, much like those in the U.S. intelligence community who are not among moles on a decades-long mission subverting the American republic, specifically, as well as institutional arrangements supporting a system of sovereign nation states more generally. Pope Francis certainly knows what's going on and is quite worried, as well.

Make no mistake about it, Team Fraud has plenty to worry about now with increasing pushback materializing in the U.S. Congress. As of yesterday, both houses now have bills before it seeking reinstatement of Glass-Steagall. This development comes on top of Senator Elizabeth Warren's legislation partially nationalizing the U.S. Federal Reserve for the sake of financing the U.S. Department of Education's Stafford loan program—a move effectively acting as a foot in the door to reestablishing the Bank of the United States. Alarm in many a mahogany paneled boardroom housing morally bankrupt representatives of anti-American, imperial interests surely must be developing. As EIR's Jeffrey Steinberg notes, an identical bill submitted to both houses of Congress has "short-term immediate implications" pointing to "legislation intended to be passed and put on the President's desk."

So, let's just say Team Fraud very soon probably will need scuttle the present moment's euphoria in a fit of panic aiming to refocus attention on the otherwise bankrupt financial, economic, social and political agenda its captive interests have been promoting for some decades now. In the case of the supposedly "independent" Federal Reserve a full century of principally inflationary, unproductive credit creation, now off the charts—hyperinflationary—is at stake.

A closer look at yesterday's dissection of the Dow's wave c up from mid-November 2012 finds technical conditions ripe for a turn lower, yet for some days to come still likely only modest in effect. We can look back to the period from mid-March to mid-April for a preview of what's likely.

The dynamism of an Elliott 3rd wave certainly is on display here. Still, slowly but surely it's fading. Likewise, given the technical backdrop leading up to formation of this particular Elliott 3rd wave off November 2012 bottom, we can be fairly confident that, once 5 waves up have completed and another Elliott 3rd wave prospectively takes form, this time down, the typical dynamism of an Elliott 3rd wave will make those shovels billionaire suckers advocate for the bear camp useful for burying the garbage these will find excruciatingly difficult to offload at a profitable price. Confetti's hyperinflationary happiness is on its last leg and Congress evidently perceives this quite acutely, while the "filthy rich," apparently without a worry, simply fail foresight of a future just filthy.

Analysis centers on the stock market's path of least resistance. Long-term, this drives a simple strategy for safely investing a 401(k) for maximum profit. Intermediate-term, investing with stock index tracking-ETFs (both their long and short varieties) is advanced. Short-term, stock index options occasionally offer extraordinary profit opportunities when the stock market is moving along its projected path.

Nothing is set in stone. Nor is the stock market's path of least resistance always known. More often than not, there are no stock index option positions recommended.

Thursday, May 16, 2013

What can I say? I really haven't been much for writing while watching everything play out as it has. Besides, it has been all "top" risk alert here for several years now. Nothing has changed either. All the same, as far as we can tell, too, levitating trash still remains the nature of the game we're watching play out...

Let's take the view that, an a-b-c-x-a-b-c is unfolding off March 2009 bottom—specifically, a "double zig-zag." Although these prospective component waves are not labeled above, we see this "double zig-zag" forming wave X, which is labeled. The Dow's advance off March '09 bottom, then, is assumed forming a "connecting wave" of a "double three" Elliott corrective wave that has been unfolding off the Dow Jones Industrials Average's January 2000 peak.

The first "three" of this complex corrective wave formed a 3-3-5 "flat." Its component waves unfolded from January 2000 - March 2009 and are labeled A, B and C.

As I said, the "connecting" X wave up from March '09 bottom, itself, formed a "double three," this being a so-called "double zig-zag."

Now, the second "three" in this "double three" corrective wave forming off the Dow's Y2k peak is likely to take a wave form "alternating" from the first "three." So, the first "three" being a 3-3-5 "flat" raises probability the second "three" will take the form of a 5-3-5 "zig-zag" [down]. This anticipation, again, is raised by the Elliott Wave Principle's "alternation guideline."

So, anticipating a 5-3-5 "zig-zag" down once wave X is completed (see below), enter possibility March '09 bottom could be taken out like support never existed there, this forming the anticipated zig-zag's wave A in a 5-wave collapse. Picture the Dow falling to 3600, stat, as in some approaching moment even this year. Subsequently, the zig-zag's wave B, lifting the Dow back to the 6600 to 7500 range, only to be followed by the zig-zag's wave C, tortuously sinking the Dow to as low as 1733 over the course of a period lasting, say, 5-8 years.

I've mentioned this possibility here before. I'm mentioning it again because it still is very much living.

Ya know what, too? If it happens, the Dow still will remain in a long-term uptrend! Just sayin'.

Could such a spectacular collapse, indeed, actually happen? Absolutely. The true craziness of modern "finance," indeed, finds but objective concurrence in this very credible Elliott wave-based possibility I am again raising here.

Now, the Dow's weekly chart technicals provide provocative substantiation of this possibility, too. There are a couple negative relative strength divergences to keep an eye on. There's also on display via MACD the Elliott Wave Principle's "alternation guideline," this contrasting the components of the "double zig-zag" forming off March '09 bottom. As we can see, too, the Dow's upside momentum (again, looking at MACD) is reaching a peak level subsequent to which the Dow (and the entire market for that matter) typically has reversed course.

We might likewise wonder here, too, though, whether in the framework of fundamental reality finding quiescence with a fantasy-filled regulatory policy a "double zig-zag" unfolding off March '09 bottom could evolve into a "triple zig-zag." This certainly is possible. So, as the second zig-zag of the double zig-zag forming off March '09 bottom nears its completion, we should be aware how fundamental developments in fantasy land might determine which of the finite Elliott-based possibilities here actually come to fruition.

As the dynamism of [the second zig-zag's] wave c up from mid-November 2012 has been notable (and excruciating to the bear camp, no doubt!)—a very typical Elliott third wave characteristic—closer inspection of the Dow's technical state at daily intervals provides us bearing on the nearness of the inevitable moment of truth.

There is a good technical case to suppose the 3rd wave of 5 waves up from mid-November 2012 is just completing (these 5 waves up are completing wave c of the second zig-zag up from March '09 bottom). In fact the 5th wave of this 3rd wave has "extended," this off late-February 2013 bottom.

Note, though, how during formation of the 3rd wave of wave 3 unfolding from mid- to late-January 2013, the best technical readings were established, while ever since negative technical divergences have coincided with subsequent Dow peaks. We see this both via RSI (top panel) and MACD (bottom).

Note, too, how momentum (i.e. MACD) during formation of wave iii of 3 of c from mid- to late-January 2013 bested its best reading during formation of wave b (this unfolding from late-November 2011 to mid-November 2012), while failing to exceed its best during formation of wave a (this unfolding during the market's spectacular advance of October 2011, itself in fact bringing a positive "outside month": a true rarity, as well as fitting a climate of sheer panic insightfully remembered as "God save our sinking ship!").

Analysis centers on the stock market's path of least resistance. Long-term, this drives a simple strategy for safely investing a 401(k) for maximum profit. Intermediate-term, investing with stock index tracking-ETFs (both their long and short varieties) is advanced. Short-term, stock index options occasionally offer extraordinary profit opportunities when the stock market is moving along its projected path.

Nothing is set in stone. Nor is the stock market's path of least resistance always known. More often than not, there are no stock index option positions recommended.

Wednesday, May 15, 2013

Wow. Just how fantastically absurd must be credulity needed to sustain the unsustainable really is off the charts. This AP thing plainly exposes an intensifying effort to ratchet up police state and effectively impose dictatorship through the institution of the U.S. presidency. This specific action, presumably targeting AP for its exposure of CIA intrigues (that's not what Uncle Sam's spying rationale is identified as being, but what it more accurately is seen merely recognizing al Qaeda as the CIA's Arab Legion), appears part of a new phase in the destruction of the U.S. republic ongoing in the modern era since JFK's assassination in particular. Likewise, press freedom in the crosshairs probably is best thought but another component of actions tracing from Benghazi to Newtown to Boston. We might assume, then, assassination threats targeting the U.S. president, no doubt, are quite real, and this no matter how witting the Obama administration otherwise has been as accomplice to incredible evil perpetrated at the highest levels of the U.S. government during Obama's tenure.

The common thread with Watergate we have been hearing of late all too likely is being spun by imperial moles within the intelligence community to be sure.

The real tip off here is AG Holder's claim AP has endangered American lives with its reporting. Oh yeah? What about the hundreds of millions of Americans whose livelihoods have been sold down the river in the imperial globalization scam? How about the tens of millions swindled into a debt trap from which hope of escaping is fast diminishing in a collapsing physical economic environment? Let's not forget the millions over the past several years whose homes have been stolen, either! What say ye, oh AG, of the pensioners whose fortunes now are at risk in a casino perpetually on the verge of going bust, this being exposed for all to see by an insolvent Federal Reserve's infinite QE? How about the fact the casino also must launder hundreds of billions of dollars per year amassed in the illegal drug trade in order to stay afloat? What of the countless young lives being destroyed by this? Does this somehow make their increasingly unemployed status more bearable, as the problem now can be claimed their own fault for having made bad life decisions?

Well, clearly, that the covert op targeting AP has become public knowledge—it's doubtful this exposure was intended—certainly says something about a brewing war within the intelligence community pitting incredulous patriots (let's hope anyway) against slimy moles working for bankrupt oligarchs. This intensifying turn of nastiness—a different kind of explosiveness, but dangerous nonetheless—simply cannot be a good thing for suckers who see a rising stock market from here to eternity.

Let's go with the above Elliott wave-based possibility applied to the NYSE Composite Index supposing that, a "zig-zag" up from early-October 2011 bottom is completing, with 5 waves up from mid-November 2012 forming the zig-zag's wave c just about reaching their end. Indeed, this broadest of market measures has displayed typical technical dynamics accompanying component waves of a 5-wave advance, unlike those more narrowly based measures like the S&P 500, for example.

Remaining to be seen, then, is whether the NYSE Composite's 3-wave advance off its early-October 2011 bottom completes the second a-b-c of a "double zig-zag" up from March 2009 bottom, or forms wave b of (b) of B (with wave B forming since March '09 and wave (b) since February 2011—see Monday's discussion). In either case the possibility of a chaotic decline taking out March '09 bottom over coming weeks certainly remains on the radar. This possibility furthermore is heightened by the fact the NASDAQ Composite appears to be completing wave B of an a-b-c corrective wave forming off its March 2000 peak (see last Friday's discussion).

We are unmistakably seeing different Elliott wave views across the various major U.S. stock indexes. Above, one of the broadest measures is seen prospectively registering what could prove a very major top. Likewise do we see this, too, per the NASDAQ Composite Index. Yet per the Dow Jones Industrials Average and the S&P 500, an Elliott third wave's typical dynamism appears more acute. The technical configuration accompanying each index's respective 5-wave advance off mid-November 2012 bottom—this in both cases forming an Elliott 3rd wave—suggests these more narrowly based measures still are some way from completing, at least time-wise. Quite the contrary appears the case, though, per the NYSE Composite Index, as we can see above.

What's "curious" about this to be sure is, and has been for a long time now, the NYSE's cumulative advance-decline line, which since March '09 bottom persistently has been in "Mmmm, yummy garbage" mode, scarcely missing a beat and behaving as though the NYSE Composite were double its October 2007 record high. "Something's just not right" is conclusion this disparity still brings to mind. Typical Elliott "b" wave character is, and has been for a long time now, vividly displayed on this account. Likewise, should the NYSE Composite in fact be registering a major top at this early juncture (relative to more narrowly based measures), all the more will objective evidence indicating "something's just not right" be in place, how ever "subtle" this additional facet substantiates that very conclusion.

Analysis centers on the stock market's path of least resistance. Long-term, this drives a simple strategy for safely investing a 401(k) for maximum profit. Intermediate-term, investing with stock index tracking-ETFs (both their long and short varieties) is advanced. Short-term, stock index options occasionally offer extraordinary profit opportunities when the stock market is moving along its projected path.

Nothing is set in stone. Nor is the stock market's path of least resistance always known. More often than not, there are no stock index option positions recommended.

Tuesday, May 14, 2013

It's still garbage! In fact advancing participation has been stinking so badly this year—this on top of an ever thinning bid exposing contrived demand amidst fearlessness the bearded Confetti evidently believes his is power to command (not to mention everyone who overlooks his institution's insolvency)—that it rather appears this trash is closer to being buried than likely to carry the S&P 500 to 1900, as the squeaking empiricist Laszlo suggests, not to mention RBC's 2400. (Why not hold out for an even 5K, Rob? You think Confetti will ever stop?)

In fact this likely burial is the overriding subject of the four missing posts prior to today's. These will be published momentarily.

As for bonds being "unshortable," Dave ... don't look now but the 10-year U.S. Treasury appears to be suggesting global central banks may be on the verge of losing all control (or, more accurately, finding the world at large increasingly gaining recognition of this already well-established fact).

Oh, yes, and one other thing... In case ya haven't noticed things in Washington are getting rather hairy, and so there ain't gonna be a "grand bargain" relieving Treasury, that is if this president desires to make it to 2016...

Analysis centers on the stock market's path of least resistance. Long-term, this drives a simple strategy for safely investing a 401(k) for maximum profit. Intermediate-term, investing with stock index tracking-ETFs (both their long and short varieties) is advanced. Short-term, stock index options occasionally offer extraordinary profit opportunities when the stock market is moving along its projected path.

Nothing is set in stone. Nor is the stock market's path of least resistance always known. More often than not, there are no stock index option positions recommended.

Monday, May 13, 2013

The case made here Friday suggesting the NASDAQ Composite is completing wave B of an a-b-c Elliott corrective wave forming off its Y2k peak now brings us to the NYSE Composite Index's prospective Elliott wave count and a harmonious projection of extraordinary weakness likely in store over the coming period...

Even the above "best case" Elliott wave count applied to the NYSE Composite Index does not diminish the possibility a spectacular decline might be forthcoming, much as the wave count applied Friday to the NASDAQ Composite presently suggests. As has been indicated here before, wave (b) of B could see its completion in a smashing sinking the NYSE Composite below its March '09 low, while wave (c) of B subsequently fails to rise above that low, thus making wave B—the middle wave of an a-b-c decline from the NYSE Composite's October 2007 peak—a so-called "running correction" and trapping today's garbage collectors with claims whose present day, extraordinarily rich value might not be seen again for many years to come.

This is, of course, just one possibility. There are worse, as well as better intermediate-term price action prospects we could consider. One worse would have the NYSE Composite presently completing an a-b-c-x-a-b-c "double zig-zag" up from March '09 bottom and about to collapse to levels last seen in the 1987-1994 period, this forming wave C down from October 2007 peak. One better alternate path forward would have the NYSE Composite falling slight lower than its March 2009 bottom (this completing an a-b-c down from October 2007, thus rather forming a larger wave A down), then rising in a 3-wave advance carrying the index to a new record high, this forming a larger wave B up. Lying in between these worse and better possibilities is future price action remaining within the bounds of the NYSE Composite's October 2007 peak and its March 2009 bottom unfolding over the course of, say, the next five years or so. Given the two better alternate possibilities, the NASDAQ Composite likely would continue forming wave B of its a-b-c decline from Y2k over the next several years, as well.

All credible possibilities aside, though, a couple overriding considerations lend focus to our view forward here. First is the assumption the NYSE Composite in October 2007 completed a 5-wave advance from 1974 and declined from that peak in 5-wave fashion. As Elliott corrective waves unfold in 3 waves, not 5, we can assume, first, the NYSE Composite's decline into March 2009 bottom did not complete an Elliott corrective wave countering the index's advance from 1974-2007, and second, the index's October 2007 peak will not be exceeded until 3 waves down from that peak have formed. Thus, our utter skepticism of the market's advance since March 2009 and commensurate conviction on this account lent by an extraordinarily suspect technical backdrop. Although nothing is set in stone, of course, we can have a lot of confidence that, the market's March 2009 bottom was not the end of it.

The other overriding consideration supporting a more dire outlook, of course, is the complete bankruptcy of today's financial, economic, political and social arrangement. Plainly, by the seeming lack of cogent perception reflected by today's mass consensus we're so broke we can't even pay attention! Obviously, a commanding knowledge of history is not one of contemporary mankind's strong suits. This deficiency apparently is made only worse by a widespread belief in magic, whether this be in religious conviction or so-called markets. It seems there is not an aspect of human existence presently at risk of serious correction. Thus, we might find it no unusual coincidence the weighing machine that is the stock market presently concurs rather thoroughly.

Analysis centers on the stock market's path of least resistance. Long-term, this drives a simple strategy for safely investing a 401(k) for maximum profit. Intermediate-term, investing with stock index tracking-ETFs (both their long and short varieties) is advanced. Short-term, stock index options occasionally offer extraordinary profit opportunities when the stock market is moving along its projected path.

Nothing is set in stone. Nor is the stock market's path of least resistance always known. More often than not, there are no stock index option positions recommended.

Friday, May 10, 2013

With the onset of national banking now squarely in the crosshairs, the continued survival of today's insolvent trans-Atlantic banking system propped up by equally bankrupt central banks now faces a degree of danger unlike anything since the disintegration of Adam Smith's Leveraged Ponzi Scheme in 2008. As ever in the evolution of developments over recent years, the fate of today's plainly unsustainable arrangement ultimately hinges on developments in the political realm.

Yet whether to come is a continuing hyperinflationary deluge accompanying senseless class warfare through the imposition of austerity—the fascist central banking approach—or speculative credit starvation—this now on the table with Senator Elizabeth Warren's bill directing the Federal Reserve to finance the U.S. Department of Education's Stafford loans at the discount rate of 0.75%—today's imperialist game of make believe plainly will be subject to increasing political scrutiny no matter which course ultimately gains ascendency. At stake, however, is more than just the rate of contraction in prices commanded by garbage at the bottom of the capital structure, an inevitability otherwise preordained no matter which politically driven course forward is taken. Hanging in the balance in fact is whether bottom ever will be found before all that we know and take for granted is tragically destroyed, as today's representatives of a corrupt western European oligarchy evidently intend through a "responsibility to protect" [terrorists] policy suiting a nefarious objective seeking to trash sovereign nation states, whose ultimate target, as ever, is fatally compromising the leading historical role the United States has played in defending the principal of national sovereignty.

The crack in the dike Senator Warren's bill forms with a foot in the door portending creation in the U.S. of a Hamiltonian credit system financing investment in the one and only thing whose leveraging is not inherently inflationary—human creativity—puts us at the precipice of game changing events possessing potential to establish a bottom wherein today's hopelessly insolvent morass proves to possess all the destructive power of a popped tulip bubble several centuries ago (which is to say the bubble's popping need not prove catastrophic).

One result of today's global central bank hyperinflationary deluge aiming to prop up a mountain of credit securities amassed over decades through "creative" financial mechanisms (derivatives) principally organized by the London-New York Axis of Fraud is a noticeable turn of late toward the least loved among bottom rung assets whose greater number are listed on NASDAQ. Least loved in absolute number, that is, as NASDAQ's cumulative advance-decline line has long testified.

We might assume a diminishing case for putting money to work on the NYSE for more or less technical reasons is disproportionately driving capital toward NASDAQ-listed issues over the past month, rather than some phantom "recovery" being behind the seeming increase in love for the more beaten and bruised among bottom rung financial assets. Again, long diminishing daily volume of shares traded across all major, global stock exchanges more or less quiets any "recovery" argument. There's far more garbage higher up in the capital structure requiring support than there is capital allowing love to broaden across all financial assets. That's the truth underlying so-called "recovery," as well as diminishing activity at the bottom rung of the capital structure.

The recent turn toward the least loved is better seen below. For the sake of gathering the big picture the Elliott wave count applied to the weekly chart of the NASDAQ Composite above certainly presents technical evidence supporting a view warning of imminent risk of a major market rout. Not only is this prospective Elliott wave count technically confirmed, but that greater measure of underlying conviction technically in evidence since March '09 bottom, while persistently fading as was the case leading into NASDAQ's 2007 peak, rather suggests current conditions are but more conducive to the lug nuts falling off the market than was the case back in 2008.

Although lacking in this formation of a prospective "rising wedge" off NASDAQ's March '09 bottom is typical 4th wave versus 2nd wave technical deterioration (RSI came close), that a "c" wave is seen being formed by this rising wedge otherwise might properly account for this lacking (a "c" wave being an Elliott 3rd wave which typically is the most "dynamic" of all Elliott component waves). Suffice it that NASDAQ's best momentum reading (see bottom panel) since March '09 bottom came during formation of wave c of 3 in February 2012—a 3rd wave of a 3rd wave of a 3rd wave (the latter 3rd wave being wave (c) [of B]).

Hope you're holding your nose! The distinct odor of garbage New York readers might be detecting (that is beyond the usual) probably is coming from the NASDAQ market site. One characteristic of Elliott "b" waves is the conclusion that, "something's just not right." A notably pathetic new 52-week high-low differential of NASDAQ-listed issues certainly fits the bill at the current moment finding the NASDAQ Composite at its highest level over the past decade plus.

The one place where prayers of a comeback probably have been most pervasive over the past decade likely has been NASDAQ. That only a connecting wave (i.e. a "b" wave) in a larger Elliott corrective wave has been forming over the interim since October 2002 bottom no doubt is confirmed by the above measure, revealing dead animal spirits amidst undiminished hope of their eventual revival. Chances are what's about to be proven at every level of the capital structure is what a big mistake this prayerful disposition has been toward what have been for a long time now the least loved of all.

Analysis centers on the stock market's path of least resistance. Long-term, this drives a simple strategy for safely investing a 401(k) for maximum profit. Intermediate-term, investing with stock index tracking-ETFs (both their long and short varieties) is advanced. Short-term, stock index options occasionally offer extraordinary profit opportunities when the stock market is moving along its projected path.

Nothing is set in stone. Nor is the stock market's path of least resistance always known. More often than not, there are no stock index option positions recommended.

Thursday, May 09, 2013

Here's why Senator Elizabeth Warren's "Bank on Students Loan Fairness Act" (S.987) is merely a foot in the door to reestablishing a Hamiltonian credit system in the United States—an end whose consequence effectively would see the U.S. Federal Reserve nationalized and transformed into the Third Bank of the United States...

Gainful employment for even college graduates is collapsing under the weight of a banking system choking on garbage. Therefore must credit be made available for financing much more than college educations.

Appropriately challenging work also must be fostered to meet the creative capacities of a labor force possessing diverse educational backgrounds. Plainly, today's banking system is not up to the task. That's why Senator Warren's bill really is only a foot in the door.

Reality vividly depicted above (and not so subtly underscored by Senator Warren's legislative initiative) points to the urgent need for furthering a national dialog not so overwhelmingly accommodating to imperial finance at the expense of everything else. Big problemo for that dominating part of our world hooked on hyperinflation needed to sustain the illusion of "value" underlying the wares it peddles. A change in the political conversation necessarily means a likely alteration in the degree of influence that dying part of our world requires in order to maintain the illusion of its "value." Not to say it has none. Rather only to question the "value" it presently assumes. The picture above does all the talking, really, as does Senator Warren's bill portending creation of the Third Bank of the United States (a portent her bill at least makes implicit).

Truth is no matter any likely pending Team Fraud initiative venturing to shanghai Elizabeth Warren's bill, that the national conversation invariably will increasingly call into question today's status quo really should be the crux of a rational investor's thinking in formulating his or her outlook. So very few people understand the nature of the imperial beast dominating today's financial, economic, political and social setting. It rather seems a "my way or the highway" affair. Zero prosecutions following 2008's financial debacle rather confirms a black and white state in which we presently appear tragically situated. Chances are, then, even the slightest denial of "my way" more or less assures "the highway" will be traveled. Given how precariously geared is today's arrangement encompassing much of what passes for modern life, any significant change in the national conversation such as Senator Warren's bill is set to initiate has a much better than 50-50 chance of putting our world on a highway to hell.

Still, this very likelihood probably will but hasten full nationalization of the Federal Reserve. Thus the true irony of our experience since 2008's collapse of Adam Smith's Leveraged Ponzi Scheme is the degree to which Team Fraud has apparently remained in control of that debacle's fallout when in fact, by the exceedingly accommodating defense of a hopelessly bankrupt system, principles lying at the heart of the American Revolution not so mysteriously are being resurrected. Call me a wide-eyed optimist, but with each passing century's challenges to our republican form of government overcome, it's only proving more difficult for the Venetian mafia—Europe's oligarchy headquartered in the City of London—to continue controlling humanity through deception and intrigue. It's on this note we might otherwise begin to ponder how Elizabeth Warren's initiative could spark a movement at the highest levels of civilized society seeking to install republican forms of government in every English-speaking land throughout the world, as well as beyond, this for the determined sake of uplifting English culture's possession of a most refined humanistic quality predisposed to serving all mankind's benefit. As few who understand the nature of the imperial beast presently subverting humanity, equally as few likely recognize currently existing—this a direct result of accomplishments the United States has secured over the course of its 200+ years—the historic opportunity to peacefully export the American Revolution like it's nobody's business. The entire industrialized world, as well as so-called emerging markets finds itself in an unparalleled, precarious position. Never has the opportunity been so ripe to uplift all humanity with fruits grown through the fullest manifestation of constitutional republic—an achievement that the United States, itself, on a scale of 1-10, at best has reached a 5, and so still risks its permanent decline. Yet an historic occasion is at hand to mitigate this risk for at least several generations and quite likely longer. Indeed, it's this kind of necessary thinking alone that could turn Elizabeth Warren's meager offerings into an unimaginable, bountiful harvest for all humanity awaiting national banking in the space age.

Analysis centers on the stock market's path of least resistance. Long-term, this drives a simple strategy for safely investing a 401(k) for maximum profit. Intermediate-term, investing with stock index tracking-ETFs (both their long and short varieties) is advanced. Short-term, stock index options occasionally offer extraordinary profit opportunities when the stock market is moving along its projected path.

Nothing is set in stone. Nor is the stock market's path of least resistance always known. More often than not, there are no stock index option positions recommended.

Be Strong

Matthew 24:13

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